Shorting Facebook Is a Pricey Proposition, For Now

Short sellers looking to pounce on Facebook’s disappointing debut in the public markets will have to pay a hefty premium.

About 18 million Facebook shares are on loan, considered a proxy for short-selling activity, according to figures from securities-financing tracker Data Explorers, a Markit company. That’s about 4% of the free float of shares on the open market, which is a pretty low amount when compared to other bigname tech IPOs. By comparison, more than 70% of LinkedIn shares were out on loan after the company’s IPO last May.

The limited supply of Facebook shares on loan has been coupled with high demand, driving the price to short Facebook even higher. The cost to borrow Facebook shares is in the most expensive universe of stocks that Data Explorers tracks.

Facebook shares are up 2.6% to $31.70. The gains come after shares dropped 8.9% yesterday, and 11% on Monday. The stock priced on Friday at $38, which at the time valued the company at about $104 billion.